NRLA adds voice to calls to reverse benefits freeze

The NRLA has added its voice to calls to reverse the freeze on Local Housing Allowance (LHA) rates, signing a joint letter to the Prime Minister with other industry leaders.

We have joined forces with the Chartered Institute for Housing (CIH), the National Housing Federation (NHF) and homelessness charities including Crisis and Shelter to send the letter, asking for LHA rates to be restored to at least the 30th percentile from next year.

The LHA sets the limit on how much rent support people who receive benefits can access – with a freeze, implemented in April, meaning rates are no longer pegged to real-world rents.

Increasing levels to the 30th percentile would guarantee renters would be able to afford a third of the available properties in their area, at the cheapest end of the market.

Shortfalls

As of November 2024, almost half, a total of 48%, of the 1.6 million private rented households in receipt of Universal Credit faced a shortfall between the financial support they receive and their rent, sometimes amounting to hundreds of pounds.

In-depth data makes for grim reading, with research from Crisis suggesting fewer than three in every 100 private rented properties in England are now affordable for people on housing benefit.

This is down from 12% in 2021-22 – the first year of the previous freeze.

The impact is dramatic, with charities reporting people forced onto the streets, due to the lack of affordable homes and frozen benefits payments.

In addition to this thousands of people, including nearly 170,000 children, are currently trapped in temporary accommodation, which is often overcrowded and of poor quality, unable to move on into settled homes.

The Local Government Association (LGA) has warned frozen LHA rates have burdened councils in England with over £700 million in unrecoverable costs over the past five years, with latest government data showing councils in England spent £2.8 billion on temporary accommodation last year — an increase of 25 per cent in just 12 months. 

What do we want to see?

In the letter we argue that restoring the LHA to cover at least the cheapest 30 per cent of rents in a local area would lift 75,000 children and 125,000 adults out of poverty across the UK.

Now, as the Budget on November 26th approaches, we are calling on the UK Government to:

• Restore LHA rates to at least the 30th percentile from 2026/27, with a commitment to maintain this level for the duration of this Parliament and increase the benefit cap accordingly.
• Undertake a full assessment of the likely social and economic impact of restoring LHA rates to the median (average) rent, as understanding the wider benefits of a more adequate support system is essential to informed policymaking.

Ben Beadle, NRLA Chief Executive said: “Housing benefit must reflect the reality of today’s rental market. Right now, tenants on the lowest incomes are being locked out of the sector altogether because the support they receive simply doesn’t match up to actual rents.

“The Chancellor has an opportunity this autumn to put things right. Unfreezing Local Housing Allowance (LHA) and ensuring it covers at least the bottom 30 per cent of local market rents would make an immediate and meaningful difference. It would help families avoid arrears, reduce the risk of homelessness, and give landlords greater confidence to let to those in receipt of benefits.

“This is a call backed by tenants, landlords and organisations across the housing sector. It is time for the Government to act.”

More than 40 signatories, from lobbying groups to charities, have added their names to the letter, which has been sent to Prime Minister Sir Keir Starmer, Chancellor,  Rachel Reeves, new Housing Secretary, Steve Reed and Work and Pensions Secretary, Pat McFadden.

More information

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